Despite the Recession, Execs Say CSR is Important

According to the just released results of IBM's second annual global corporate social responsibility of senior business executives, CSR still remains a priority. The problem is their ability to attain it.

Nearly all of the 224 respondents said they remain committed to incorporating CSR principles into their business strategies—despite the global recession—to improve business performance, societal contribution and reputation.

However the report identified three specific problems:

Companies aren't collecting and analyzing all the right information about CSR or aggregating it often enough. That means they can't implement real changes that would fundamentally increase efficiency, lower costs, reduce environmental impact and improve reputation with key stakeholders;

Few are collecting enough CSR data from global supply chain partners -- missing a major opportunity to reduce inconsistency, inefficiency, waste and risk that can ripple through a global supply network;

Most still don't understand the concerns of their key stakeholders, particularly customers, and are not actively engaging them. That means they're not capturing valuable insights that could improve their businesses and provide access to new opportunities.

For example, only 19 percent are collecting data on CO2 emissions weekly or more frequently. The rest are collecting it no more than monthly, and most only quarterly -- ample perhaps for meeting government or stakeholder demands for information, but not nearly enough to make systemic changes that would reduce environmental impact.

However, respondents who reported outperforming competitors are doing all those things better -- collecting and analyzing the right data frequently to make better decisions, incorporating CSR information from suppliers, and engaging with customers.

Companies are coming under increasing pressure from governments, advocacy groups, investors, prospective employees, and consumers to make their operations, products and services more socially responsible. This covers a range of topics, including environmental concerns, labor practices, product safety and traceability, and procurement practices. At the same time, they are under tremendous economic pressure to reduce costs and increase efficiency wherever possible.

Businesses that are successful in addressing CSR issues as part of their overall strategies will have a significant advantage attracting investors, talent and customers, developing new products and services, and gaining access to new markets and new opportunities. It also will help them improve operational efficiency and reduce costs, and meet regulatory requirements, which can allow them to qualify for incentives and avoid penalties.

Key findings of the survey include:

Eight-seven percent of executives responding to the survey say they are focusing CSR activities on improving efficiency, and 69% say they are using CSR to help create new revenue opportunities;

Only 30% are collecting data frequently enough to make strategic decisions that address inefficiencies across eight major categories -- CO2, water, waste, energy, sustainable procurement, labor standards, product composition and product lifecycle. Twenty-four percent are collecting this information only monthly and 32 percent no more than quarterly;

Twenty-nine percent aren't collecting any data at all from their supply chains. Eight in 10 aren't collecting supplier data for CO2 and water, and six in 10 aren't checking supplier data for labor standards.

Sixty-five percent say they still don't understand their customers concerns about CSR issues. And 37% aren't conducting any research on the topic;

Outperformers among the respondents rank consistently higher in collecting every type of CSR information frequently or in real-time across all major green and sustainability categories -- from CO2 emissions and water conservation to ethical labor standards and sustainable procurement. They also ranked higher in information collection from suppliers;

Nearly twice as many of the outperformers said they understand customer concerns about CSR. They are also more proactive in collaborating with key stakeholders and twice as likely to rate open sharing of information among business partners and stakeholders of the highest importance in achieving their CSR objectives;

Despite the current global recession, 60% said CSR is more important to their businesses now than it was a year ago, with only 6% saying it was less important.

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